China-U.S. to Boost Accounting Communication and Cooperation

Apr. 30 – In a meeting with a delegation from the American Institute of Certified Public Accountants on Monday, April 23, Deputy Minister of Finance and President of the Chinese Institute of Certified Public Accountants, Li Yong, emphasized the importance of communication and cooperation between China and the United States in the field of accounting. He noted that such dialogue not only conforms to the trend of global governance in international accounting, but also serves the interest of the strategic economic and trade partnership between China and the United States.

Li put forward the role and performance of public accounting in China and the future development of the industry in China during the visit of the U.S. delegation.

Li said China is dedicated to establishing the following:

Internationally recognized auditing standards and professional ethics

An examination system that is in line with international standards

An education system that focuses on competence and lifelong learning

A quality management system that is independent, preemptive and conducts long-term monitoring and periodic examination

In the aspect of service providing, many agencies are expanding rapidly and some influential Chinese public accounting agencies have set up overseas branches. These entities are enhancing their ability to provide more comprehensive overseas services, as well as expanding into different fields – from auditing to consulting, and non-auditing taxation services. Furthermore, public accounting is playing a more important role in foreign trade and foreign investment in China.

According to China’s Ministry of Finance, with regards to social influence, the development and improvement of China’s public accounting industry ensures the order of the market and a healthy economic development. The industry is also well-supported by the government. In the 12th Five-Year Plan, the government has included certified public accountants in the middle and long-term talent scheme.

With the advancement of globalization, accounting assumes a more significant role in global economic governance. Li pointed out that it’s possible and necessary for China and the United States, the world’s two largest economies, to strengthen communication and cooperation in the field of public accounting.

Li lists four suggestions for future cooperation.

Under the framework of the U.S.–China Strategic and Economic Dialogue, China and the United States should make the most of the advantage of public accounting to enhance mutual trust and cooperation in economics and finance.

China and the United States should further coordinate cooperation in international accounting organizations and collectively promote the internationalization of public accounting.

China and the United States should maintain high-level contacts and deepen cooperation in training, standardization, and quality management. Efforts should also be made to promote the mutual recognition of standards of practice and monitoring systems which will better serve the capital flows between China and the United States, as well as cooperation between enterprises.

China and the United States should jointly support the work of related international organizations, such as International Federation of Accountants and International Accounting Standards Board, for advancing the internationalization of public accounting standards.

Financial ManagementThis issue of China Briefing details FCPA regulations, fraudulent accounting practices within Chinese companies and due diligence issues for IPO listings. It also covers PRC GAAP regulations, compliance with them and the differences between EU and U.S. standards.

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